Trade Surplus: It is a situation in which the total value of exports of a nation during the year exceeds the total value of imports.
(i) Over the 19th century, British manufacturers flooded Indian market. Food grains and raw material exports from India to Britain and the rest of world also increased.
(ii) Value of British exports to India was higher than imports from India.
(iii) Britain, as such had "Trade surplus" with India. Britain used this surplus to balance trade deficit with other countries.
(iv) This is how a multilateral settlement system works that allows one country's deficit with another country to be settled by its surplus with a third country.
(v) India played a crucial role in helping Britain to balance its deficits. Britain's trade surplus in India helped paying the home charges that included private remittances home by British officials and traders.
